This piece by journalist Walker Bragman was written in partnership with the Important Context newsletter.
Last year, as it was raking in cash from its COVID vaccine and newly authorized oral treatment Paxlovid, pharmaceutical giant Pfizer spent big bucks to safeguard its intellectual property (IP), federal lobbying disclosures reveal. The nearly $900,000 lobbying tab came amid a global fight over how best to ensure fair access to COVID tools like vaccines, diagnostics, and therapeutics.
Uneven distribution of such tools has been an ongoing problem throughout the pandemic, which has killed more than six million people worldwide by official numbers. Estimates of its true death toll, however, range into the tens of millions. Wealthier nations have hoarded critical supplies while lower-income countries in the Global South have struggled with procurement.
One solution that has gained traction at the World Trade Organization (WTO) and the World Health Organization (WHO) is an intellectual property waiver for COVID tools. The idea has faced stiff opposition from the pharmaceutical industry. Pfizer in particular has long been lobbying to stave off any such waiver.
The company’s spending on the issue through last year, including $140,000 in the fourth quarter alone, shows how significant and persistent a threat those global discussions are to its bottom line and provides insight into how the pharmaceutical giant has prioritized profits over global equity and human lives.
Global Battle For Equity
Efforts to address intellectual property barriers to equitable delivery of COVID tools go all the way back to October 2020. That month, the governments of India and South Africa proposed a Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver at the WTO. The proposal, which had the support of 62 member states and more than 100 low-income nations, was expansive. It would have temporarily waived intellectual property protections for COVID technologies including vaccines, diagnostic kits, personal protective equipment, ventilators, preventative medicines, and treatments.
The TRIPS waiver proposal stalled for months due to opposition from the U.S., member states of the European Union, the UK, and other nations even as COVID ripped across the globe, killing millions and leaving many with long-term complications. All the while, global efforts to ensure vaccine access without breaking patents have been unsuccessful. The COVID-19 Vaccines Global Access (COVAX) initiative, led by GAVI Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations, and the WHO, has fallen far short of its goals.
In May 2021, the Biden administration broke ground by announcing its support for a vaccine technology IP waiver at the WTO. Notably, the administration did not endorse the India/South Africa proposal.
“The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines,” U.S. trade representative Katherine Tai announced on May 5. “We will actively participate in text-based negotiations at the World Trade Organization (WTO) needed to make that happen.”
Just over a year later, on June 17, 2022, the WTO’s Ministerial Conference adopted a ministerial decision on the TRIPS Agreement for COVID vaccines and vaccine components, allowing eligible WTO members to use, without the consent of the right holder, patented “ingredients and processes necessary to manufacture the COVID-19 vaccine” through any instrument available in their law regardless of whether or not they have laws on the books governing compulsory licenses, which are licenses created by statute for the use of copyrighted materials.
The decision directed WTO members to “decide on its extension to cover the production and supply of COVID-19 diagnostics and therapeutics” as well within six months. The WTO missed the deadline, punting the decision to this year.
Significant as the WTO’s ministerial decision was—during the negotiations, WTO Director-General Ngozi Okonjo-Iweala called the forthcoming agreement “a major step forward”—critics noted that it fell far short of the TRIPS waiver proposed by India and South Africa in 2020.
For one thing, it only applied to vaccines—not diagnostics, therapeutics, personal protective equipment, or ventilation. What’s more, it made only minor clarifications under TRIPS, including eliminating a requirement that members seek prior authorization from patent holders before using their patented vaccine technology and waiving certain export restrictions. Worse, only developing country WTO members without “existing capacity to manufacture COVID-19 vaccines” were eligible under the agreement to take advantage of the waiver. Those members with such capacity were “encouraged to make a binding commitment not to avail themselves of this Decision.”
Following the release of the decision, James Love, the director of Knowledge Ecology International, a prominent non-governmental organization that is focused on issues like IP and governance, wrote that it was “a limited and disappointing outcome overall that is most accurately described as a narrow and temporary exception to an export restriction, not a waiver.”
Speaking to Important Context, Love noted that there were “strings attached” with the new agreement that rendered it “almost useless.”
“Instead of a waiver of its own rules, they came up with new rules and they’re highly conditional,” he said.
Love explained that vaccines made in accordance with the decision could not be exported to high-income countries and that countries would have to amend their laws to take advantage of the agreement. He said that no country has made use of the June 2022 ministerial decision to date.
To his point, there remains today a significant gap in global vaccination rates between high and low income countries despite the WTO’s ministerial decision. As Harvard’s Bill of Health noted in November, “only 23% of the population in low-income countries has received a dose, while 82% of the population in high- and upper-middle-income countries has been vaccinated.”
Ideally, Love said there would be a more permanent exception to IP protections during pandemics. However, that conversation, he explained, is now happening at the WHO and is “much more important at this point” than ongoing deliberations at the WTO.
Last month, the WHO released a zero draft of its forthcoming Pandemic Prevention, Preparedness and Response Accord, which includes recommendations for waiving patents during pandemics. According to law firm and lobby shop Akin Gump Strauss Hauer & Feld LLP, it could have “significant implications for a range of stakeholders involved in pandemic response, including medical product manufacturers.”
“The WHO proposal goes farther than the WTO would have gone,” Love said. “It actually mandates [countries] to use exceptions [to IP protections], and it’s broader than just the WTO rules.”
To Love’s point, the draft includes language that “In the event of a pandemic, the Parties…will take appropriate measures to support time-bound waivers of intellectual property rights that can accelerate or scale up manufacturing of pandemic-related products during a pandemic, to the extent necessary to increase the availability and adequacy of affordable pandemic-related products.”
The document also states that its parties “will apply the full use of the flexibilities provided in the TRIPS Agreement” and “shall encourage all holders of patents related to the production of pandemic-related products to waive, or manage as appropriate, payment of royalties by developing country manufacturers…and shall require, as appropriate, those that have received public financing for the development of pandemic-related products to do so.”
Love told Important Context that while there is already opposition at the WHO to the scope of the intellectual property provisions of the zero draft, the body doesn’t have to “operate by consensus.”
“It’s easier to get something intellectual property through the WHO than the WTO,” he said.
The COVID pandemic has been a cash cow for drug manufacturers like Pfizer. Last year, Pfizer alone reported a record $100 billion in earnings thanks largely to its lifesaving COVID tools.
The company’s mRNA vaccines, which rely on a technology developed out of years of publicly-funded research, accounted for $37.8 billion of the impressive haul. Another $18.9 billion came from sales of Paxlovid, the 5-day post-infection oral treatment course that received emergency use authorization from the Food and Drug Administration in December 2021 and was the first effective treatment of its kind. The company sought full approval for its new drug in June 2022.
The month before Paxlovid’s authorization, the U.S. government awarded the company a $5.3 billion contract for 10 million courses. It would double that order in January 2022 and spend an additional $2 billion in December to supplement with 3.7 million more courses for 2023. Although sales are projected to fall this year, the projections remain substantial at $8 billion.
An intellectual property waiver would threaten the new revenue stream. When the Biden administration announced its support for a patent waiver in May 2022, pharmaceutical stock prices dropped off.
The pharmaceutical industry and Pfizer, in particular, have fought hard to prevent any proposed waivers of IP protections. According to an October 2022 report from The Bureau of Investigation Journalism, days after the Biden administration announced its support for an IP waiver for vaccines, Pfizer met with UK trade policy minister Greg Hands, vaccines minister Nadhim Zahawi, and international trade secretary Liz Truss.
Last February, Pfizer Chairman Albert Bourla wrote an open letter publicly advocating against a COVID-related IP waiver, claiming such a policy would disrupt the flow of raw materials and “disincentivize” research.
“I worry that waiving of patent protection will disincentivize anyone else from taking a big risk,” Bourla wrote. “We deployed $2 billion before we knew whether we could successfully develop a vaccine because we understood what was at stake.” (Although its research began beforehand, Pfizer did receive a $1.95 billion advance order for 100 million doses of its vaccine from the U.S. government as part of the Trump administration’s Operation Warp Speed.)
Even though it was ultimately a far cry from the October 2020 TRIPS waiver proposal from India and South Africa, the WTO’s June 2022 ministerial decision still rankled the pharmaceutical industry. Pharmaceutical Research and Manufacturers of America (PhRMA), the major industry trade group to which Pfizer paid $411,000 in membership dues in 2021, put out a press release slamming the decision.
“The top trade officials from 164 nations gathered in Geneva, Switzerland and failed the global population,” wrote PhRMA president and CEO Stephen Ubl. “Rather than focus on real issues affecting public health, like solving supply chain bottlenecks or reducing border tariffs on medicines, they approved an intellectual property waiver on COVID-19 vaccines that won’t help protect people against the virus.”
Federal lobbying disclosures reveal that Pfizer paid big bucks to major law firms and lobby shops last year to protect its intellectual property rights for lifesaving technologies like Paxlovid. The company spent at least $860,000 on the effort.
Starting ahead of the WTO agreement last year, Pfizer paid Akin Gump $150,000 to lobby on its behalf. It began with $50,000 in the second quarter to lobby on “issues related to international protection of intellectual property rights, USTR transparency.” Following the June 2022 WTO ministerial decision on vaccines—and the ensuing discussions about expanding its scope to include other COVID tools—the pharmaceutical giant spent another $100,000 split evenly between quarters three and four to lobby on Issues related to the “waiver of intellectual property rights for COVID therapeutics and diagnostics.”
Pfizer spent $110,000 last year with Altrius Group, a D.C.-based lobby shop, to lobby on “Compulsory licensing of US IP by foreign governments; WTO COVID TRIPS waiver proposal; Promotion of robust IP protection for biopharma innovations before WTO and in current and future FTAs.” The breakdown was $20,000 in the first quarter and $90,000 split three ways between quarters two, three, and four.
The company paid NVG, LLC, $240,000 last year, $60,000 per quarter, to lobby on a small number of issues including “intellectual property, data exclusivity, and patent eligibility.” In the third quarter, it lobbied on “issues related to TRIPS waiver expansion” specifically. Between the first and second quarters, it paid lobby shop Roberti Global $120,000 to lobby the House and Senate on “issues involving international trade, including IP protections.” Pfizer spent another $60,000 per quarter, totaling $240,000, last year retaining the services of Duberstein Group, Inc., to lobby on a handful of issues including the TRIPS waiver.
Pfizer has tools besides lobbying to wield influence in politics. The company is a prolific spender, contributing to both major parties.
According to OpenSecrets, in the 2022 cycle alone, the company’s PAC gave $90,000 to the Democratic Senatorial Campaign Committee, $75,000 to the National Republican Senatorial Committee, $31,000 to the Democratic Congressional Campaign Committee, $30,000 to the National Republican Congressional Committee, and $15,000 to the Democratic National Committee. That spending is merely what came from the organization itself and does not include the total counting contributions from individuals, like company executives.
Shortly after the Biden administration’s statement in May 2021 in support of a TRIPS waiver for vaccines, 16 Republican senators, almost all of whom had received money from PhRMA or Pfizer’s PACs in the previous election cycle, sent a letter to Commerce Secretary Gina Raimondo denouncing the idea. Some of the signers co-sponsored an amendment filed by Sen. Mike Crapo of Idaho that sought to make it harder for the U.S. to agree to waive COVID vaccine patents under the TRIPS Agreement. A Sludge analysis of OpenSecrets data found that the amendment’s 18 GOP co-sponsors had received “on average, nearly twice as much in pharmaceutical and health products campaign donations over their careers as have the 32 GOP senators who did not co-sponsor it.”
Pfizer’s spending was not just limited to national politics. According to Political Moneyline, last year, the company spent hundreds of thousands of dollars at the state level including $250,000 to the Republican Governors Association, $525,000 to the Democratic Governors Association, $225,000 to the Republican Attorneys General Association, $150,000 to the Democratic Attorneys General Association, $430,000 to the Republican State Leadership Conference, and $165,000 to the Democratic Legislative Campaign Committee.
Pfizer has also benefited from the revolving door between the public and private sectors. The company brought Donald Trump’s former Food and Drug Administration Commissioner, Dr. Scott Gottleib, onto its board in 2019 and made him chair of its Regulatory and Compliance Committee.
Featured image by Important Context newsletter.